Business

VAFI: Sabeco leader appointed 'illegally'

Released at: 17:06, 14/06/2016

Photo: Duc Anh

Mr. Vu Quang Hai oversaw losses in previous position and should never have been appointed as Deputy CEO of Saigon Beer Alcohol-Beverage Joint Stock Corporation, according to Vietnam Association of Financial Investors.

The Vietnam Association of Financial Investors (VAFI) has called for the dismissal of Mr. Vu Quang Hai as Deputy CEO of the Saigon Beer Alcohol-Beverage Joint Stock Corporation (Sabeco) due to his inexperience and the “illegality” of his appointment.

In a June petition sent to the Minister of Industry and Trade Tran Tuan Anh for the fourth time, VAFI said that Mr. Hai’s appointment described the appointment as “illegal” because he was legally responsible for losses in his previous position.

The son of former Minister of Industry and Trade Vu Huy Hoang, Mr. Hai was appointed as to the position in early 2015 when he was only 28 years of age. He was previously appointed as CEO of the PetroVietnam Finance Investment JSC (PVFI) when he was only 25.

In the petition, VAFI cited PVFI’s losses under Mr. Hai’s stewardship of VND155 billion ($6.97 million) in 2011 and VND67 billion ($3 million) in 2012, while the company's charter capital is only VND300 billion ($13.5 million).

Though VAFI viewed PVFI as “nearly bankrupt” during Mr. Hai’s leadership, he was moved to the Ministry of Industry and Trade (MoIT)’s Vietnam Trade Promotion Agency after one year and shortly afterwards became Sabeco’s Deputy CEO.

“He oversaw PVFI record losses for two consecutive years and should be forced to resign from Sabeco,” VAFI’s Mr. Hai told VET. “But he has not.”

VAFI also doubts the legal basis for Mr. Hai’s appointment at the MoIT's Vietnam Trade Promotion Agency and as Sabeco’s Deputy CEO, as State representative of equity of VND12 trillion ($540 million).

The association also questioned the responsibility of Deputy Minister of Industry and Trade Ms. Ho Thi Kim Thoa in signing the decision appointing Mr. Hai as Deputy CEO of Sabeco.

Regarding the equitization of MoIT enterprises, VAFI believes there are some problems in the Hanoi Alcohol and Beverage Corporation (Habeco) and Sabeco being equitized nearly eight years ago but are yet to move under the management of the State Capital Investment Corporation (SCIC) as requested several times.

“If former Minister of Industry and Trade Mr. Hoang transferred Sabeco to SCIC his son would have no chance of being a leader of Sabeco,” VAFI wrote in the petition.

Sabeco’s after-tax profit in 2015 has been reported at nearly $153 million, a 25.5 per cent increase against 2014. Its 2015 full-year turnover increased 2 per cent to $361 million, according to the company’s consolidated financial report.

Sales rose 2 per cent to $335 million, pushing up gross profit by 2.5 per cent against 2014 to more than $26 million. Revenue from financial operations stood at $163 million, a year-on-year increase of 21.3 per cent.

According to a report from the Vietnam Beer Association, in 2015 the Vietnam’s beverage industry produced over 3.4 billion liters of beer, an increase of 40 per cent compared to 2010. Vietnam currently has 129 breweries, most of which are in large cities and provinces such as Hanoi, Ho Chi Minh City, and Thua Thien Hue.

The majority of the market is still controlled by Sabeco, Habeco and multinational breweries like Heineken and Carlsberg. The country’s beverage industry is forecast to have a capacity of 4.25 billion liters of beer, 9.2 billion liters of non-alcoholic beverages, and 360 million liters of spirits by 2020.